Ooyala: First Brightcove, Then the World

Ooyala, a video startup founded by former Google employees we’ve been keeping an eye on, invited us over to its office this week. The company has grand ambitions of creating a “user-centric monetization model,” where objects in videos like a car or an actress are recognized and made clickable. That metadata can then be searched, expanded upon Wikipedia-style, and monetized (see example screenshot below).

“Since people are skipping ads, really the solution is to increase the number of advertising opportunities,” explained CEO Bismarck Lepe. “Instead of 8 to 10 points [for commercial breaks] per show, you have thousands of opportunities to monetize.”

We’re not alone in fixating on the fact that these guys left Google in April (after working on YouTube monetization and other products). To describe their labeling system, Lepe referenced Gmail; to explain how their usage graphs are displayed, he used Google Finance. Heck, to justify the free Greek food in the kitchen he even used Google. And co-founder Sean Knapp, of course, promises the company will be “the next Google.”

But first the team realized it needed to have some content to analyze, so it developed a distribution platform it’s calling “Backlot.” The product is basically a competitor to Brightcove aimed at mid-tier publishers. Starting next week it is to be available as a self-service product. Customers can upload, manage, syndicate, and track their content. We haven’t fully tested the product, but the player and backend look quite elegant. You can see a live deployment at gaming community site Voig.

Lepe claimed Ooyala’s prices are a fifth of what you’d pay for traditional content management, with Knapp declining to share the secret sauce but saying he’s figured out a way to “push stuff through cheaper pipes.” Sounds a bit like the homegrown system built by Justin.tv we mentioned last night; both startups have publicly said they use Amazon Web Services.

See the corporate promo video for Backlot (oddly resemblant of an airplane safety message, no?) below.

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In preliminary testing, the company has found that people are most likely to interact with sports content. Six out of ten watchers clicked within a video for every 10 minutes they watched. On the flip side, only five percent of people watching drama programs with clickable items took any action. Belsasar Lepe, Bismarck’s brother and the third co-founder of Ooyala, put it this way: “Our goal is to enrich the video enough for people to be able to lean forward.”

As a viewer, I have trouble trusting that Ooyala’s primary objectives — maximizing money and maximizing quality of experience — won’t conflict. In response to my concern, Bismarck Lepe again references Google. “Some people are just not going to want ads, and that’s fine. It’s about showing the ads to the right users.”

Mountain View-based Ooyala is not disclosing who its funders are, though it has raised a round. The company is moving from trial phase to full implementation with customers such as Voig, so it expects to generate its first revenue before the end of this year.